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Suppliers would be unable to cope if the UK public sector now made a wholesale move to shared services, says a key government figure.

The public sector would disrupt the market by fully deploying shared services at this time, David Myers, director of the Whitehall team leading on shared services in government, warned on 20 September.

According to Mr Myers, the shift towards public bodies consolidating their back-offices – driven by the Government's efficiency review - could have major ramifications for vendors due to the market's immaturity.

Current market capacity is one of the key obstacles preventing shared service delivery from taking off in government, he told a local eGovernment conference in London.

He commented: "If all of the UK public sector embraced shared services, the market will grow so much instantly that the private sector would not be able to provide the solutions."

Mr Myers, who directs the Shared Services Programme in the Cabinet Office e-Government Unit, said there was also a risk that public bodies would "flood" the provider market, with "everyone in government trying to sell to each other".

He went on: "We are faced with undercapacity at the moment and potential overcapacity in the future. We need to do a better job with shaping the market so the public sector gets what it wants."

Mr Myers said that he wanted to open "a debate about how we look at government infrastructure."

He disclosed that the programme is looking at "the highest level of aggregation" – services being shared within entire sectors, such as health, education and police. This, it is hoped, would help reduce duplication of effort, as well as IT hardware and software costs.

Despite highlighting what he said were "huge challenges" ahead, Mr Myers presented the shared service approach as offering a wide range of benefits for the public sector.

"We think it can deliver efficiencies as much as 50 per cent, looking at data on Human Resources, as well as improve services and empower staff", he told the conference.

On top of this, the shared service model would regenerate local economies and stimulate housing markets, he claimed.

In another new development, it was announced to delegates that the three-year Shared Service Programme team will offer 'resources' – but not explicitly funding – to public bodies wishing to partake in pathfinder projects.

Plans are also in the pipeline to expand the recently-launched Shared Services Toolkit to include ready-made service level agreements for shared service projects.